Unattainable Gas Turbines: Orders Pushed to 2030, AI Power Shortage Brings a Long Profit Period for the Three Giants

The AI boom is driving the prosperity of data centers, fueling unprecedented electricity demand, and leading global gas turbine giants into an extraordinary long-term high-profit cycle.

German energy equipment supplier Siemens Energy recently disclosed its Q1 FY2026 (October-December 2025) data, continuing its strong momentum, with net profit soaring from €252 million in the same period last year to €746 million; driven by sustained demand for gas turbines and grid equipment, the company’s order intake for this quarter surged 34% to €17.609 billion, pushing backlog to a record €146 billion; profit (before special items) increased 141% year-over-year, with profit margins expanding from 5.4% to 12.0%; pre-tax free cash flow surged 87.8%.

Its gas services business was particularly impressive. In Q1, orders in this segment increased over 81% on a comparable basis to €8.751 billion; it secured 102 gas turbine orders, a quarterly high, with a quarter (22 GW) related to data centers; strong order demand mainly came from the US, Poland, and Turkey. The grid business saw a 21.8% YoY increase in order intake, approaching €6 billion, with profit margins (before special items) rising from 12.50% to 17.60%. The industrial transformation segment’s orders reached €1.579 billion, up 11%. Siemens Gamesa’s wind power division improved its profit margin from -15.5% to -2%.

Financial reports show that the US is the largest contributor to Siemens Energy’s order and revenue growth this quarter, with increases of 59% and 25%, respectively. In Q1, the US market accounted for 40% of Siemens Energy’s gas turbine orders and was the biggest growth driver for its grid business.

Faced with exponential growth in computing power demand, aging US power grids are increasingly overwhelmed. Unable to tolerate or wait for grid expansion and a grid connection waiting period of over five years, AI giants are bypassing the grid by building their own gas power plants, directly fueling a surge in gas turbine orders.

Compared to intermittent renewable energy, gas turbines can start and stop quickly, provide uninterrupted power, and be rapidly deployed to data center campuses. Although demand is exploding, the high technical barriers and long expansion cycles of gas turbines have caused the “Big Three”—GE Vernova (US), Siemens Energy (Germany), and Mitsubishi Heavy Industries (Japan)—who control three-quarters of the global gas turbine market, to doubt whether this demand surge can last long enough to recover the investments needed for new capacity. Their unusually conservative and cautious stance on expansion stems from deep industry cycle awareness and painful memories of the early 2000s dot-com bubble burst.

However, the flood of orders is gradually dispelling these concerns.

Christian Bruch, President and CEO of Siemens Energy, stated during an investor call after the earnings release that he does not agree with the notion of a data center bubble, because “almost all of the current bookings can be converted into effective orders.”

In less than two years, Siemens Energy’s stock price has increased more than tenfold. The company, which previously faced financial difficulties in its wind power business, prompted the German government in November 2023 to provide a €7.5 billion state guarantee. Since the beginning of this year, its stock has risen about 32%, making it the best performer in the German DAX index.

Recent one-year stock price trend of Siemens Energy

In FY2025, Siemens Energy sold 194 gas turbines, doubling its sales from FY2024; in just the first quarter of FY2026, its gas turbine orders already exceeded 50% of FY2025’s total, indicating very strong sales momentum, Bruch said.

During the earnings call, Bruch mentioned that delivery times for gas turbines are scheduled into 2029 and 2030, with limited supply in 2028. He explained that due to long lead times, more customers are pre-ordering capacity, and compared to existing contracts, new orders offer more attractive profit margins. Despite regional differences, price increases are a general trend.

Siemens Energy’s guidance for FY2026 and FY2028

“Fulfilling all backlog orders will be a huge challenge for the entire industry,” he said. “It’s not just about expanding equipment capacity—it’s also about the supporting capabilities of construction and civil engineering companies. Over the next 12 to 24 months, we need to consider how to accelerate industry development.”

In early February, Siemens Energy announced a plan to invest $1 billion to expand its grid and gas turbine manufacturing in the US. Bruch explained that this move aims to alleviate supply chain bottlenecks.

Global Energy Monitor data shows that the US currently leads the world in under-construction natural gas power capacity, with over one-third planned to directly supply data centers. By 2025, US under-construction natural gas capacity will nearly triple to about 252 GW. If all these plants are completed, US natural gas capacity will grow by nearly 50%, with estimated capital expenditures exceeding $416 billion. Texas is the center of US gas power expansion, with under-construction capacity nearly four times last year’s, and about half (40 GW) planned directly for data centers.

The organization states that global gas power expansion is constrained by gas turbine capacity, with backlog orders generally extending to 2030. GE Vernova, Siemens Energy, and Mitsubishi Heavy Industries hold over 75% of the under-construction gas power market.

Thanks to its better-than-expected financial performance, GE Vernova’s stock price hit a new high of $816.48, nearly 5.9 times its price when spun off from GE in April 2024.

As of the end of FY2025 (December last year), GE Vernova’s backlog reached a record $150 billion, with orders in 2025 totaling $59.3 billion, up 34% YoY. Power segment orders reached $32.8 billion, up 52%, with EBITDA margins increasing by 220 basis points. In Q4, 24 GW of gas turbines were ordered, with “customers pre-paying for future capacity, demonstrating extremely strong market demand.” The company raised its FY2026 revenue guidance to $44-45 billion, with an adjusted EBITDA margin of 11%-13%, and also upgraded its financial outlook for FY2028.

GE Vernova also faces unprecedented capacity constraints. By the end of 2025, its gas turbine backlog and capacity reservation agreements increased from 62 GW to 83 GW. Its expansion plans, initially aiming for 20 GW annual capacity in Q3 2026, have been moved forward to the first half of 2026, and further increased to 24 GW by 2028.

CEO Scott Strazik stated on January 28 that he expects the company’s gas turbine backlog to reach 100 GW by the end of this year, with 2029 and 2030 capacities nearly sold out.

In addition to gas turbines, GE Vernova’s grid business is also experiencing soaring profits amid the global power supercycle.

GE Vernova’s guidance for FY2028

On February 4, Mitsubishi Heavy Industries announced that its orders, revenue, and profits for the first three quarters (ending December 2023) all increased significantly, and it raised its full-year outlook. During this period, orders rose 12.6% YoY to ¥50.291 trillion; net profit attributable to parent company owners was ¥210.9 billion, up 22.6%; EBITDA reached ¥393.1 billion, up 21.0% YoY, with an EBITDA margin of 11.8%.

The energy systems division is Mitsubishi Heavy Industries’ core profit driver. In the first three quarters, it signed contracts for 31 large gas turbine units, up 15 from the previous year, mostly from North American and Asian customers. Revenue increased by ¥75.9 billion, with the largest growth in the gas turbine combined cycle (GTCC) business.

CFO Hiroshi Nishio said that all business segments showed strong order performance, with the surge in data center construction fueling the current gas turbine boom cycle. Demand remains robust, especially in the US. “Revenue from gas turbine combined cycle and defense aerospace has grown, and both are handling the largest backlog in the company’s history.”

Mitsubishi Heavy Industries plans to double its gas turbine capacity within the next two years to meet surging demand and backlog. “Our original plan was to increase capacity by 30%, but that’s far from enough. Fulfilling these orders is our top priority,” said CEO Eisaku Ito last August. Due to rising raw material, parts, and labor costs, the company will improve supply chain efficiency and production processes to expand capacity.

Investment bankers believe Mitsubishi Heavy Industries’ guidance is quite conservative. After investor events in December, JPMorgan analysts raised GE Vernova’s target price to $1,000, the highest on Wall Street.

The exciting financial data just previews the tip of the iceberg; in the coming years, gas turbine giants will be earning huge profits.

(Source: The Paper)